Bumper Rains, Better Crops: Good News for Food Prices & Ethanol Makers?

This year’s monsoon has come as a blessing — not just for farmers but also for ethanol producers and consumers. With 84% of India receiving normal to excess rainfall, kharif sowing is on track, especially for key cereals like rice and maize. This sets the stage for lower food inflation and higher ethanol output. How’s the Monsoon So Far? The southwest monsoon (June–Sept) delivers 75% of India’s annual rain. As of 27 July, rainfall is 8% above normal. 28 states/UTs have normal/excess rain 8 states, like Assam (-43%), Bihar (-44%), and Andhra Pradesh (-12%), are rain-deficient Rajasthan (+91%), MP (+56%), and Gujarat (+35%) have received heavy rain Maize is the New Star Crop Once just animal feed or for starch, maize is now key for ethanol, thanks to new grain-based ethanol plants. 50% of India’s ethanol = from sugarcane Rest = from broken rice & maize India imported 1 million tonnes of maize in 2024–25, 6x more than the previous year With ethanol demand rising, maize has moved from a “side” crop to a strategic one for food, fuel, and feed. Food Prices Easing June food inflation: -1.06% — lowest since Jan 2019 Vegetables (tomatoes, onions, potatoes): 30% cheaper YoY Pulses down 4–30% Rice prices stable, supported by MSP If the monsoon continues strong and global import costs remain stable, food inflation will stay low. Plus, strong rains mean a good rabi season is likely too. In short: Good rains → Better sowing → Lower prices More maize → More ethanol → Lower oil imports But policymakers must balance ethanol incentives with support for pulses & oilseeds to ensure nutritional and crop diversity isn’t lost.

etc Sugar Stocks Should be on Radar.